<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 22, 1996
PLAINS RESOURCES INC.
Delaware 0-9808 13-2898764
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
1600 Smith
Houston, Texas 77002
(Address of Principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 654-1414
<PAGE>
ITEM 5. OTHER EVENTS.
THIS REPORT IS BEING FILED PURSUANT TO RULE 135c(d) UNDER THE SECURITIES
ACT OF 1933.
On February 22, 1996, Plains Resources Inc. (the "Company") issued a news
release that is attached hereto as Exhibit 20.1 (the "News Release") wherein the
Company announced, among other things, its intention to commence an offering of
$125 million principal amount of ten year, senior subordinated notes in the
near future.
The paragraph in the News Release that announces the Company's intention
to commence such offering reads in its entirety, as follows:
"The company also announced that it intends to commence an offering
of $125 million principal amount of ten year, senior subordinated notes
in the near future. The company stated the offering will be conducted as
a private placement pursuant to Rule 144A. The notes have not been
registered under the Securities Act of 1933 and may not be offered or
sold in the United States absent registration or an applicable exemption
from registration requirements. If consummated, the proceeds from such
offering will be used to redeem the company's existing 12% Senior
Subordinated Notes at 106% of their $100 million principal amount, and
the remaining proceeds will be applied to reduce a portion of the
indebtedness incurred in connection with the company's recent acquisition
of the Illinois Basin properties."
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
20.1 News Release issued by Plains Resources Inc. on February 22, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: March 5, 1996
PLAINS RESOURCES INC.
By: /s/ Michael R. Patterson
----------------------------------
Vice President and General Counsel
<PAGE>
EXHIBIT 20.1
PLAINS
RESOURCES NEWS RELEASE
- -------------------------------------------------------------------------------
CONTACT: PHILLIP D. KRAMER
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
(713) 654-1414
FOR IMMEDIATE RELEASE
PLAINS RESOURCES REPORTS RECORD
RESULTS FOR 1995 AND FOURTH QUARTER
(Houston-February 22, 1996) Plains Resources (AMEX:PLX) today announced net
income of $2.7 million for 1995, or $.16 per share, up more than 350% over net
income of $571,000, or $.04 per share for 1994. Total revenue for 1995 was $404
million as compared to $257 million in 1994. The company reported cash flow from
operations (net income plus non-cash expenses) of $19.7 million, an increase of
17% over the $16.9 million reported in 1994. Earnings before interest, taxes,
depreciation and amortization totaled approximately $33.3 million in the
current year period, a 13% increase over the $29.5 million reported in the prior
year.
Oil and gas production volumes totaled 4.84 million barrels of oil equivalent
in 1995, a 9% increase over 1994's level of 4.43 million barrels. The company's
average wellhead price per barrel of oil equivalent increased to $13.24 per
barrel in 1995 as compared to $12.92 per barrel in 1994. Excluding the fourth
quarter acquisition of Marathon's Illinois Basin Properties, unit production
expenses decreased 3% to $5.97 per barrel of oil equivalent versus $6.15 per
barrel of oil equivalent in 1994. Unit production expenses approximated $6.25
per barrel including the fourth quarter effects of the higher cost Illinois
Basin production. Unit general and administrative expenses decreased 5% to $.99
per barrel of oil equivalent versus $1.04 per barrel reported in 1994. Such unit
costs exclude general and administrative expenses associated with the company's
downstream activities.
Unit gross profit (wellhead price less production expenses and upstream G&A
expenses) increased for the third consecutive year. Unit gross profit totaled
$6.00 per barrel of oil equivalent ($1.00 per Mcfe) in 1995 as compared to $5.73
per BOE ($.96 per Mcfe) in 1994. Unit gross profit was $5.53 per BOE ($.92 per
Mcfe) in 1993 and $4.77 per BOE ($.80 per Mcfe) in 1992.
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PAGE 2
The company's downstream segment reported aggregate gross profit from base
level marketing, transportation and terminalling activities of $6.2 million, a
32% increase over the $4.7 million reported last year. Such amounts exclude
contango-related activities. Gross profit from contango-related activities was
$121,000 in 1995 versus $1.5 million in 1994.
During 1995, the company replaced 813% of its production volumes, adding 39.3
million barrels of oil equivalent to its proved reserve base at an aggregate
average cost of $2.14 per barrel of oil equivalent ($.36 per Mcfe). Independent
engineers estimated the pretax future net revenue from the company's year-end
1995 proved oil and gas reserves at $713 million, a 71% increase over the $417
million reported last year. The pretax present value (discounted at 10%) of the
company's proved oil and gas reserves increased 60% to $367 million at year-end
1995 versus $229 million at year-end 1994.
For the fourth quarter of 1995, the company reported net income of $936,000,
or $.06 per share versus net income of $790,000, or $.05 per share for the
comparable 1994 quarter. In the current year quarter, the company reported cash
flow from operations of $5.7 million, up 16% from the $5.0 million reported in
the fourth quarter of 1994. EBITDA for the fourth quarter of 1995 totaled $9.3
million, a 15% increase over 1994's fourth quarter level of $8.0 million.
Total oil and gas production for the last quarter of 1995 was 1.35 million
barrels of oil equivalent, a 17% increase as compared to the 1.16 million
barrels reported in last year's period.
Unit production expenses and unit G&A expenses were $6.74 per BOE and $.82 per
BOE, respectively, for the 1995 fourth quarter period as compared to unit
production expenses of $5.67 per BOE and $.80 per BOE in last year's period.
Excluding the impact of the Illinois Basin properties acquisition, unit
production expenses for the fourth quarter of 1995 were $5.70 per BOE.
Excluding contango inventory transactions, downstream gross profit totaled
$1.5 million for the three months ended December 31, 1995, a 21% increase over
the $1.2 million for the same period of 1994. Gross profit from contango-related
activities was $61,000 in the 1995 period versus $200,000 in 1994.
"The 1995 results represent record levels for nearly every measure of
operating performance including production, downstream gross profit, cash flow,
EBITDA and net income," said Greg L. Armstrong, Plains' President and Chief
Executive Officer. Armstrong noted that the company expects continued growth in
production and related performance measurements to be fueled by the company's
ongoing development and exploitation activities.
"Our 1996 capital plan calls for the company to spend approximately $40
million on the exploitation and development of the company's three core
properties in the LA Basin, the Sunniland Trend of South Florida and the
recently acquired Illinois Basin properties. As a result, we are looking for
significant increases in production, cash flow and EBITDA in 1996." Armstrong
noted that the 1996 capital plan calls for significantly more drilling activity
than conducted in prior years and that the company will continue its focus on
cost reduction and cost control, both in the field and in the office.
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Page 3
"We are also looking forward to the first year of our strategic alliance and
joint venture with 3DX Technologies. We are confident this alliance will result
in improved results from our exploration effort, which will open up a new
dimension of growth potential for Plains' shareholders," said Armstrong. The
company estimated it will spend approximately $5 million on exploration
activities during 1996.
The company also announced that it intends to commence an offering of $125
million principal amount of ten year, senior subordinated notes in the near
future. The company stated the offering will be conducted as a private placement
pursuant to Rule 144A. The notes have not been registered under the Securities
Act of 1933 and may not be offered or sold in the United States absent
registration or an applicable exemption from registration requirements. If
consummated, the proceeds from such offering will be used to redeem the
company's existing 12% Senior Subordinated Notes at 106% of their $100 million
principal amount, and the remaining proceeds will be applied to reduce a portion
of the indebtedness incurred in connection with the company's recent acquisition
of the Illinois Basin properties.
Plains Resources is an independent energy company engaged in the exploration,
acquisition, development and exploitation of crude oil and natural gas and the
downstream activities of marketing, transportation, terminalling and storage of
crude oil. The company is headquartered in Houston, Texas.
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Page 4
PLAINS RESOURCES INC. AND SUBSIDIARIES
FINANCIAL SUMMARY
================================================================================
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
- -----------------------------------------------
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Year Ended
December 31, December 31,
------------------------ -----------------------
1995 1994 1995 1994
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
REVENUE
Oil and natural gas sales $ 18,466 $ 14,736 $ 64,080 $ 57,234
Marketing, transportation and storage 93,194 57,879 339,826 199,239
Interest and other income 55 75 319 223
-------- -------- -------- --------
111,715 72,690 404,225 256,696
-------- -------- -------- --------
EXPENSES
Production expenses 9,096 6,554 30,256 27,220
Purchases, transportation and storage 91,666 56,463 333,460 193,049
General and administrative 1,688 1,630 7,215 6,966
Depreciation, depletion and amortization 4,798 4,164 17,036 16,305
Interest expense 3,531 3,089 13,606 12,585
-------- -------- -------- --------
110,779 71,900 401,573 256,125
-------- -------- -------- --------
NET INCOME $ 936 $ 790 $ 2,652 $ 571
======== ======== ======== ========
Net income per common and common equivalent share $ 0.06 $ 0.05(b) $ 0.16 $ 0.04
======== ======== ======== ========
Weighted average number of common and common
equivalent shares 15,955 15,014(b) 15,981 11,625
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED BALANCE SHEET DATA
- -----------------------------------------
(in thousands)
December 31, December 31,
1995 1994
------------ ------------
<S> <C> <C>
ASSETS
Cash and cash items $ 6,129(a) $ 2,791(a)
Other current assets 57,503 38,895
Property and equipment, net 280,538 217,602
Other assets 7,876 7,616
-------- --------
$352,046 $266,904
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 68,381 $ 46,151
Bank debt 98,000 45,100
Subordinated debt 100,000 100,000
Other long-term debt 7,089 4,500
Other long-term liabilities 1,547 3,754
-------- --------
275,017 199,505
Redeemable preferred stock 0 20,937
Stockholders' equity 77,029 46,462
-------- --------
$352,046 $266,904
======== ========
</TABLE>
(a) Includes restricted cash totaling $2.8 and $1.5 million as of
December 31, 1995 and 1994, respectively.
(b) Assuming full dilution.
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Page 5
PLAINS RESOURCES INC. AND SUBSIDIARIES
FINANCIAL SUMMARY (continued)
================================================================================
FINANCIAL DATA
- --------------
(in thousands, except per unit data) (unaudited)
<TABLE>
<CAPTION>
Three Months Ended Year Ended
December 31, December 31,
------------------------ -----------------------
1995 1994 1995 1994
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Earnings before interest, taxes, depreciation,
depletion and amortization ("EBITDA") $9,265 $8,043 $33,294 $29,461
====== ====== ======= =======
Cash flow from operations (earnings before
depreciation, depletion and amortization) $5,734 $4,954 $19,688 $16,876
====== ====== ======= =======
Downstream gross profit $1,528 $1,416 $ 6,366 $ 6,190
====== ====== ======= =======
Downstream gross profit excluding contango
market inventory transactions $1,467 $1,216 $ 6,245 $ 4,718
====== ====== ======= =======
</TABLE>
<TABLE>
<CAPTION>
OPERATING DATA
- --------------
(in thousands, except per unit data) (unaudited)
<S> <C> <C> <C> <C> <C>
Average Daily Volumes
Barrels of oil: LA Basin 7.9 7.4 7.6 7.3
S. Florida 3.1 3.3 3.4 2.7
Illinois Basin(a) 2.4 0.0 0.6 0.0
Other 0.2 0.4 0.4 0.5
------ ------ ------- ------
Total 13.6 11.1 12.0 10.5
====== ====== ======= ======
Mcf of natural gas: LA Basin 4.6 4.4 4.5 4.5
Other 1.7 4.3 3.1 5.3
------ ------ ------- ------
Total 6.3 8.7 7.6 9.8
====== ====== ======= ======
Barrels of oil equivalent
("BOE"): LA Basin 8.7 8.1 8.4 8.1
S. Florida 3.1 3.3 3.4 2.7
Illinois Basin(a) 2.4 0.0 0.6 0.0
Other 0.5 1.2 0.9 1.3
------ ------ ------- ------
Total 14.7 12.6 13.3 12.1
====== ====== ======= ======
Total Period Volumes
Barrels of oil: LA Basin 728 678 2,780 2,673
S. Florida 286 305 1,255 976
Illinois Basin(a) 224 0 224 0
Other 14 38 117 186
------ ------ ------- ------
Total 1,252 1,021 4,376 3,835
====== ====== ======= ======
Mcf of natural gas: LA Basin 419 405 1,653 1,653
Other 163 399 1,125 1,916
------ ------ ------- ------
Total 582 804 2,778 3,569
====== ====== ======= ======
Barrels of oil equivalent: LA Basin 798 745 3,056 2,948
S. Florida 286 305 1,255 976
Illinois Basin(a) 224 0 224 0
Other 41 105 304 506
------ ------ ------- ------
Total 1,349 1,155 4,839 4,430
====== ====== ======= ======
Average sales price per barrel of oil $14.27 $13.43 $ 13.99 $13.65
Average sales price per mcf of natural gas 1.03 1.27 1.02 1.37
Average sales price per BOE $13.69 $12.76 $ 13.24 $12.92
Production Expenses per BOE 6.74 5.67 6.25 6.15
------ ------ ------- ------
Gross margin per BOE 6.95 7.09 6.99 6.77
Upstream General and Administrative Expenses
per BOE 0.82 0.80 0.99 1.04
------ ------ ------- ------
Gross profit per BOE $ 6.13 $ 6.29 $ 6.00 $ 5.73
====== ====== ======= ======
</TABLE>
(a) Illinois Basin properties acquired effective November 1, 1995.
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